Activation of the cyclin-dependent kinases is a two-step process involving cyclin binding followed by phosphorylation at a conserved threonine residue within the kinase activation loop. In this study, we describe the separate roles of cyclin A binding versus phosphorylation in the overall activation mechanism of CDK2. Interaction of CDK2 with cyclin A results in a partially active complex that is moderately defective in the binding of the protein substrate, but not ATP, and severely defective in both phosphoryl group transfer and turnover. Alternatively, phosphorylation of the CDK2 monomer also results in a partially activated species, but one that is severely (greater than or equal to480-fold) defective in substrate binding exclusively. Catalytic turnover in the phosphorylated CDK2 monomer is largely unimpaired (similar to8-fold lower). Our data support a model for the activation of CDK2 in vivo, in which interaction of unphosphorylated CDK2 with cyclin A serves to configure the active site for ground-state binding of both ATP and the protein substrate, and further aligns ATP in the transition state for phosphoryl transfer. Optimizing the alignment of protein substrates in the phosphoryl transfer reaction is the principal role of phosphorylation at Thr(160).